As someone who regularly tickles the ivories at home, Patricia Quinn appreciates the value of the individual note.

No note will ever become redundant, jaded or obsolete and Ms Quinn employs a similar analogy to describe the work of the Arts Council. Quoting the composer Arnold Schonberg, she says: "There is still a lot of good music waiting to be written in C major."

She says the council is not obsessed with funding "obscure experimental forms" and there is still plenty of artistic mileage in work which surprises and challenges the audience.

But for artists to explore the limitless possibilities of C major and the galaxy of other notes, grubby commodity money is needed.

While purists are deeply suspicious about business and art, Ms Quinn is emphatic that bridges must be built not only with the business community, but also with the regions, with local communities, with education institutions and even with hospitals and clinics. Art can happen and reach people anywhere, she states. But reaching those with the funds is critical and will become more so.

"Although it has to be said that not everyone in the arts world is able to look for commercial sponsorship, the bigger ones, the bigger festivals especially, are very much in the market for commercial sponsorship. They see our funding as the footprint that enables them to leverage in sponsorship and donations of various kinds," says Ms Quinn.

Fund-raising finesse among arts groups is significant she adds. "What is very interesting now is to see some of them actually beginning to look at endowed funds, trust funds. Some are beginning to look to the US. Some want to set up relationships with long-term givers from the philanthropic base," she says.

"I suppose in Ireland we are not so familiar with that kind of American-style philanthropy. But as the economy grows richer, you never know. I think it's a generational thing. Once people look after themselves and their children, people do begin to ask what legacy can I leave. You can see it in education. People are naming things, they are leaving a legacy behind for the things that they value and I suppose the arts is one of the things we value very much in this country," she says.

How far this can go is anyone's guess. While some may tremble at the idea of a Chuck Feeney Abbey Theatre, the links between arts and communities not normally engaged by the sector are going to increase.

But Government funding will remain a touchstone issue. Unlike RTÉ, the Arts Council does not benefit from index-linked annual funding and Ms Quinn would like to see a more permanent arrangement emerge. Index-linking would be nice, but so would multi-annual funding she says with a smile.

The Arts Council and the community it serves will probably not look back on 2003 with much joy.

The council claims jobs were lost, productions and tours were cancelled, artists left Ireland and uncertainty became the dominant feature of the sector.

The reason was a severe cut in State funding, which comes courtesy of the Department of Arts, Sport and Tourism and its Minister, Mr O'Donoghue. In what she hopes was a "blip", the Government decided to slash the council's funding in 2003 by 8 per cent (adjusted for inflation it actually dropped by 11.6 per cent).

Thanks to endless lobbying, gentle pressure and no doubt well-placed words in select ears, the council's chairwoman, Ms Olive Braiden, and Ms Quinn have managed to turn the situation around for 2004.

Funding, according to the recent Estimates, is set to grow by 19 per cent to €52 million and Messrs O'Donoghue and McCreevy will have the welcome mat put out for them at the council's Merrion Square offices next year if they choose to visit. Mr O'Donoghue, originally derided upon his appointment by some arts observers, has gained Ms Quinn's respect at least.

"He has actually proved himself to be an intense listener. He has taken a lot of care to inform himself. He has gone out on the highways and byways actually going to work and listening to people, meeting people in Dublin and informing himself. That has to be a good precedent."

While some in the arts sector still go misty-eyed for the days of former Minister Michael D Higgins, she says all politicans have refrained from bullying the council into promoting certain projects.

"With every Minister there is a different style, but the great thing is that politicians generally have been very respectful of the principle of autonomy and the way the Arts Council goes about its work."

This healthy relationship is important, but the restoration of the funding in this year's estimates may have had something to do with cultural forces too, she says.

"I think part of the reason the funding has gone back up, even in a difficult economic climate generally, is this recognition that the arts matter to everyone's life in some way. This idea that you don't necessarily have to dress up and go and sit in a threatre, that there are a whole range of ways to encounter the arts is gaining wider acceptance."

Asked how important are audiences to the council, she replies: "There isn't any artist who doesn't want an audience. The issue is really are they able to find an audience. Have they got everything they need? And sometimes the help people are looking for is not about a bigger cheque. It's about practical ways of reaching audiences," she says.

The demands on it for funding outstrip the council's budget by 2:1, she adds.

Asked if she is unhappy with the funding allocation generally over recent years, she says: "We could spend more but the reality is we understand that we are operating in a public sector environment where there are a lot of demands on the public purse. So what we like to see ourselves doing is spending the money we get to the maximum possible effect. Not just to support people with grants, but also to give them other kinds of help."

Irish people, probably for historical reasons, tend to think of art in positive terms, she says. "What's very precious about the way we value art in Ireland is that we place a value on it for its own sake. It's not a glib 'art for art's sake' argument but there are other countries where art is seen as a way of delivering social inclusion or economic benefits. It can be all of those things but the fundamental reason for supporting it should be because it's important in its own right."

But nobody is getting rich on it she says.

"The arts organisations we assist only ever get a fraction of their income from the Arts Council. There is nobody on 100 per cent of funding from the Arts Council. I can say that for sure."

While funding from the Arts Council is important, reaching a wider audience, outside Ireland, can transform an artist's career, she says.

"Once artists are able to find their way to other audiences, other markets, they are often hugely successful, out of all proportion to their success in Ireland sometimes. Because the markets are simply bigger."

Many of the larger theatres have become skilled cultural exporters, but the next tier is almost more important, she says.

"So we are looking at that top tier of really gifted companies where the leadership is by any standards of an exceptional quality and we're saying can we help the next tier of organisations to gain from the knowledge these people have gained by working overseas? But to be fair artists have always been very mobile creatures."